The Forest-Climate Nexus

The report "The Forest-Climate Nexus" by Climate Policy Initiative/PUC-RIO proposes a new financial architecture to transform tropical forests from climate risks into solutions. It analyzes 91 countries, categorizing them by forest cover and deforestation rates, and introduces the Reversing Deforestation Mechanism (RDM) to incentivize large-scale forest restoration through jurisdictional, results-based payments for net carbon removals.

• Tropical forests across 91 analyzed countries cover 1.27 billion hectares and store 593 gigatons of CO2 equivalent, representing approximately one-third of historical global emissions.
• Restoring areas deforested between 2001 and 2023 has the potential to capture up to 49 GtCO2, a significant amount compared to the remaining carbon budget for limiting warming to 1.5°C (200 GtCO2e) or 2°C (900 GtCO2e).
• The report identifies no direct relationship between a country's per capita income or GDP growth and its forest cover or deforestation rates, suggesting that forest protection does not hinder economic development.
• Tropical forest countries are categorized into three clusters: High Forest Cover/Low Deforestation/Low Carbon Potential; Low Forest Cover/High Deforestation/Low Carbon Potential; and High Forest Cover/High Deforestation/High Carbon Potential (the latter including Brazil, Indonesia, and the DRC).
• The proposed Reversing Deforestation Mechanism (RDM) is a results-based system that rewards net carbon removals—carbon captured through restoration minus emissions from deforestation and degradation—at a jurisdictional level.
• At a carbon price of US$ 50 per ton of CO2, the RDM could generate annual revenues of roughly US$ 100 billion and remove up to 2 GtCO2 per year globally in its initial years.
• The RDM is designed to complement existing mechanisms: JREDD+ (focused on avoided deforestation) and the Tropical Forest Forever Facility (TFFF, focused on preserving standing forests).
• Effective forest policies are often vulnerable to political cycles, with deforestation rates frequently fluctuating based on electoral incentives and shifts in government priorities.
• Secure land tenure and property rights are critical enabling conditions for forest conservation; for example, a land registration program in Benin reduced deforestation by approximately 20%.
• To ensure the permanence of carbon sequestration, the report suggests a Permanence Fund (funded by a small fee per credit) or a Forgivable Loan Structure where funds are repaid if restored areas are deforested.

APA

Assunção, J., Arbache, J. P., Chiavari, J., de Miranda, G., & Zangiski, G. (2025). The Forest-Climate Nexus. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2025/10/The-Forest-Climate-Nexus.pdf

Chicago

Assunção, Juliano, João Pedro Arbache, Joana Chiavari, Giovanna de Miranda, and Gabriela Zangiski. The Forest-Climate Nexus. Climate Policy Initiative, 2025. https://www.climatepolicyinitiative.org/wp-content/uploads/2025/10/The-Forest-Climate-Nexus.pdf.

Wikipedia

{{cite report |last1=Assunção |first1=Juliano |last2=Arbache |first2=João Pedro |last3=Chiavari |first3=Joana |last4=de Miranda |first4=Giovanna |last5=Zangiski |first5=Gabriela |title=The Forest-Climate Nexus |publisher=Climate Policy Initiative |date=October 2025 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2025/10/The-Forest-Climate-Nexus.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{assuno2025forestclimate, author = {Assunção, Juliano and Arbache, João Pedro and Chiavari, Joana and de Miranda, Giovanna and Zangiski, Gabriela}, title = {{The Forest-Climate Nexus}}, institution = {Climate Policy Initiative}, year = {2025}, month = oct, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2025/10/The-Forest-Climate-Nexus.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }